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Italian Solar: La Dolce PVita

Harry Moncur

Italy has a great pedigree when it comes to achieving its renewable energy targets. There was a lot of excitement when its renewable targets for 2020 were reached in 2014 (17% of gross energy consumption). It follows that there should be significant optimism for the Italian solar sector, by 2030 it should have doubled in size from its 2018 installed capacity.

A curious feature of the Italian solar sector is the lack of international coverage it receives. It may be that other markets such as the Middle East are drawing the headlines, or it may be that with classic Italian sprezzatura they have done a fantastic job of making the rise of Italian solar seem more effortless than it has been. In this article I will look at three reasons to be excited about the Italian solar market:

The Italian Solar Sector is Proven and Robust

One advantage Italy has over many European rivals is that it is well over the pain barrier of removing sector incentives. Following an EU wide drive following the signing of the Kyoto Protocol, Italy developed to be the world’s second largest PV market by 2013 (It had 22.4% of the EUs installed solar capacity). This was done off the back of large incentive schemes that became too expensive to support (financially and in grid management). The incentive was stopped but the industry stayed steady. Italian schemes have been characterised since by their low-cost deployment, improved IRRs of projects (with short paybacks) and low LCOEs. Having achieved such efficiency gains, a tremendous boost for the Italian renewable energy sector has arrived in the form of a new EUR 5.4bn of public funding for new schemes. The scheme has passed the EU’s state funding rules and will help firms achieve sustainable pricing for new schemes.

Pricing and Transition are Beating Fossil Fuels

There are two important factors in Italian fossil fuel use. The first is that the country is well into a coal phase-out that will be completed in 2025. In Italy’s case, experts have placed a strong emphasis on the ability to replace coal with zero emission technologies without having to build new gas facilities. Italy is much better placed than Germany in this regard and with the right policies and governmental support are poised to hit target. Secondly Italy, through its reliance on gas, has often been a premium priced market, as with the rest of the world the economic advantage of solar energy will be decisive in its growing success.

Italy is a Rewarding Market for Quality Focused Solar Firms

Edison have just acquired EDF’s Italian solar assets (77MW), with plans for greater collaboration with EDF renewables on future solar schemes. Edison have a track record in Italian projects with several solar plus storage schemes in Southern Italy at the end of 2018. Edison alongside established players such as Eni, Enerray and Enel recognise there are opportunities for firms with an emphasis on quality and reliability.

Beyond quality, Italy is also an innovation hub for solar technology. A great example are Eni who have a fantastic R&D centre in Novara which counts MIT amongst its partners. The centre has significant success in substituting polymers for silicon in panels making them cheaper and more versatile.

The Sun won’t set on Italian Solar

With the myriad of positive reasons to have faith in the Italian solar sector, it is easy to forget how blessed the country is for sunshine. Yields per square metre range from 3.6kwh in the Po Valley to 5.4kwh in Sicily. The country has huge solar potential. Most of the existing solar is in the North with the high potential regions in the Central & South areas open to significantly more development. It’s fair to say that Italian solar is living La Dolce PVita!